August 1, 2017
How are Condo Fees Calculated?
New changes to the way Toronto condos are managed – and the amount of fees paid by residents – are on the way.
As of November, the majority of the Condominium Management Services Act, which was passed by the Ontario legislature in 2015, will finally come into force. The act is part of Bill 106, better known as the Protecting Condominium Owners Act, and will have clear ramifications for a large number of condo dwellers.
In the most recent National Household Survey (NHS) conducted in 2011 by Statistics Canada, data showed that 1,615,485 households (12.1 per cent of the population) lived either as owners or renters in condos. A more recent study by the Association of Condominium Managers of Ontario revealed there are more than 1.3 million condo residents in the province.
Nowhere is this more pronounced than in the GTA, specifically in Toronto’s downtown core where the skyline has transformed over the past decade. As more people are priced out of the detached house market, condos in Toronto have become the dwelling of choice for many. But while many prospective buyers and renters are now electing to go the condo route, there are some additional costs they may be unaware of, in particular, maintenance fees.
Related Read: What Are Pre-Construction Condo Development Charges?
Just how much someone pays in condo fees can fluctuate widely, and there are a number of variables that go into deciding just how much you pay.
Size Matters When Calculating Condo Fees
Steven Christodoulou is president and CEO of ICC Property, a condo management company that has been operating across the GTA for 25 years. The firm manages 175 condo buildings across the region, accounting for 19,000 units. Todoulou oversees the maintenance and upkeep of an array of different buildings, with contrasting fees to match.
“People like to compare condo fees and someone might wonder why they are paying $400 when their neighbour is paying $300,” he explains. “You might have a condo with 150 units, or one with 250 units. Each of the condos may have three elevators, the same sized roof, the same security contract, but the smaller condo has 100 less units to amortize the costs over. So size of condominiums plays a huge role in fees.”
Older Buildings Tend to Have Higher Fees
Aside from the size of the condo, the building’s age also factors into the fees residents will pay. The general rule is the older the building, the higher the fee, but for different reasons, as Christodoulou outlines.
“Some of the older condos tend to have higher maintenance fees because utilities are normally included,” he says. “In newer condos the gas and hydro will normally be over and above your maintenance fees.”
Also to take into account is general wear and tear, which is a formality when you are dealing with -30C weather each winter.
“Brand new buildings have 25 years before they need to replace an underground parking garage, for example,” he says. “Some of the older buildings are at a point where that work needs to happen now, so their maintenance fees will tend to be a little higher.”
You’ll Pay for Great Service
When it comes to condo management and the fees people pay, location isn’t a major factor, but the type of building certainly is. If you expect premium service, then expect to pay premium prices.
“We manage a lot of buildings in the Yorkville area that are very high-end,” says Christodoulou. “The customers are very discerning, so we have an 80-unit building with a full time property manager, a 24/7 concierge, and valet parking. Generally these fees will be the highest in the city because of all the services the owners are looking for.”
Condo Management Selected by the Board
A condominium’s management company is usually selected by the building’s board of directors, which is elected by the owners. That company is then responsible for the maintenance and general upkeep of the building, including landscaping, elevator costs, housekeeping, insurance, repairs, maintenance and utilities. Their role is therefore crucial, but it’s a role that didn’t have adequate regulatory oversight until Bill 106 came into play, explains the ICC head.
“The need for professional management is more important than ever,” says Christodoulou. “Part of that legislation means all condo managers now need to be licensed by the Condominium Manager Regulatory Authority of Ontario (CMRAO). I have always found it absurd that you need a license to sell one unit, but not to manage 300.”